Construction Partners Reports 41.6% Revenue Growth but Net Loss in Latest 10-Q Filing

Construction Partners, Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending December 31, 2024. The company achieved revenues of $561.6 million, marking a 41.6% increase from $396.5 million in the same period last year. This growth was driven by $120.9 million in revenues from acquisitions and an additional $44.2 million from existing market activities. However, the company recorded a net loss of $3.1 million, a decline from a net income of $9.8 million in the prior year, primarily due to increased general and administrative expenses, acquisition-related costs, and a substantial rise in interest expenses.

The company’s total assets surged to $2.57 billion as of December 31, 2024, up from $1.54 billion at the end of the previous fiscal year. This increase was largely attributed to the acquisition of Lone Star Paving, which added significant operational capacity, including 10 hot mix asphalt (HMA) plants and four aggregate facilities. The acquisition, completed on November 1, 2024, involved a total consideration of approximately $976.5 million, including cash and stock. The company also announced subsequent acquisitions in Oklahoma and Alabama, further expanding its footprint in the civil infrastructure sector.

Operationally, Construction Partners reported a contract backlog of $2.66 billion, indicating a robust pipeline of future work. The backlog includes $2.1 billion in uncompleted contracts and $0.6 billion in low bid/no contract projects. The company’s workforce has also grown, with an increase in employee headcount reflecting its expansion strategy. However, the company faces challenges, including rising costs associated with labor and materials, which could impact future profitability.

Looking ahead, Construction Partners anticipates continued revenue growth driven by its strategic acquisitions and strong demand in both public and private sectors. The company expects to generate approximately $1.4 billion in revenue from its backlog during the remainder of the fiscal year ending September 30, 2025. Despite the current net loss, management remains optimistic about future performance, citing the potential for improved margins as operational efficiencies are realized and as the company integrates its recent acquisitions. The company is also focused on managing its debt levels, with total long-term debt reaching $1.18 billion, up from $487 million, primarily due to the financing of its acquisitions.